Low Precipitation

Ensure your business thrives despite dry spells with our tailored low precipitation parametric solution
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Overview

Low precipitation can significantly damage property or impact business operations, resulting in loss of revenue. Our low precipitation coverage provides tailored protection against revenue losses when precipitation is less than a pre-selected trigger.

Available

Contiguous U.S.

Who can benefit
  • Hydropower generation companies
  • Agricultural businesses, such as farms and vineyards
  • Water supply companies
  • Supply chain and Logistics companies
  • Landscaping and irrigation businesses

How it works

Using CPC or PRISM precipitation data, a coverage trigger can be set based on a business’s needs and risk exposure. If cumulative rainfall falls below the threshold during the policy period, the insured automatically becomes eligible for a loss payment, helping to cover costs and maintain profitability despite challenges from low precipitation.

An example structure

For informational purposes only. Actual coverage may vary by carrier.
Context

Water supply companies that rely on locally sourced rivers and reservoirs to produce drinking water for the surrounding communities are at risk of prolonged drought. When reservoir levels fall due to lack of rainfall, private water supply companies have to pump in water from other sources which is an additional cost for the company. To protect against this potential added cost, private or public water supply companies can purchase parametric insurance that protects against low rainfall.

Contract structure
Client
Water Supply Company
location
Philadelphia, Pennsylvania
peril
Low rainfall
full limit recovery
1 inch
Payouts Based on
Cumulative precipitation
limit
$300,000
payout table example
x% for Cat 3 within 30 miles
y% for Cat 4 within 20 miles
z% for Cat 5 within 10 miles
Daily threshold
limit paid at
Payment per inch
$100,000
time period
6/1 - 9/1
Coverage trigger
4 inches
data source
National Hurricane Center
Payout profile

Next steps

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© 2023 Arbol Inc. All rights reserved.

Climate Risk Insurance Solutions LLC, doing business as Arbol Insurance Services, and operating in New York under the name Arbol Insurance Services LLC (“Arbol” or “AIS”) is licensed as a property casualty and surplus lines insurance agency in all states in which insurance is offered and such licenses are necessary to offer this insurance. All descriptions or highlights of the insurance being provided are for general information purposes only, do not address state-specific notice or other requirements, and do not amend, alter, or modify the actual terms or conditions of an insurance policy. Availability and qualification for coverage, terms, rates and discounts may vary by jurisdiction. Our state license numbers can be found here. AIS does not solicit from the public. Any carrier ratings contained herein are as of 7.18.23. A.M. Best ratings are under continual review and subject to change. Current ratings can be found at www.ambest.com.